California Organized Investment Network (COIN) Is a Collaborative Effort Between the California Department of Insurance, the Insurance Industry, Community Affordable Housing and Economic Development Organizations, and Community Advocates.

The Investigation Division investigates suspected fraud committed by insurance agents, brokers, public adjusters, bail agents, insurance companies and other individuals and entities transacting the business of insurance who perpetrate fraud against consumers.

Insurance Commissioner Dave Jones announced that the California Senate passed SB 1431, which would set guidelines for stop-loss carriers when selling policies to small employers with 2 to 50 employees. It would also apply important consumer protections found in both the federal Affordable Care Act and California's small employer health insurance law to such policies. The bill is authored by Senate Democratic Caucus Chair Kevin de León (D-Los Angeles) and sponsored by Commissioner Jones and the California Department of Insurance.

"I commend the Senate for passing legislation that will protect California's small employers and their employees as federal health care reform goes into effect," said Commissioner Jones. "This will also prohibit companies from excluding employees on the basis of health status and ensure that policies purchased by small employers are renewed."

Stop-loss insurance is a business insurance sold to companies that self-insure their employee's health care coverage. Though self-insurance is more common among large employers, there are some small employers that decide to self-insure, which involves greater risk since the health care costs of their employees could cost more than expected. In order for employers to minimize the risk, stop-loss insurance is purchased to put a ceiling on the liability of the company for the health care expenses of its employees, known as an "attachment point." The stop-loss insurer pays the employer for the amount of health claims that exceed the attachment point specified in the stop-loss insurance policy.

As federal health care reform goes into effect, there will be more incentives for small employers to self-insure and buy stop-loss coverage. Without SB 1431, small group insurance premiums could rise to unsustainable levels for small businesses inside and outside of the California Health Benefits Exchange. Stop-loss carriers could also "cherry-pick" younger and healthier employees, as well as determine which small businesses to sell to and even which individuals to exclude from within those small groups.

Currently, 15 states regulate minimum attachment points in stop-loss policies in some fashion. Three other states prohibit the sale of such policies to small groups altogether. SB 1431 is supported by the Bay Area Council, Blue Shield of California, the California Association of Physician Groups, Congress of California Seniors, the Consumer Federation of America, Consumers Union, Health Access California, Kaiser Permanente, SEIU California, and the Small Business Majority.

The bill now moves to the State Assembly for consideration.

The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $288 billion in premiums annually in California. In 2015 the California Department of Insurance received more than 155,000 calls from consumers and helped recover over $84 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.